For a 401k plan with approximately $2,000,000 in assets the range between the high and low cost providers averages around 1.33%, while the range for the middle 50% of the universe is .31%.
“Our data shows that, yes, the range between high and low costs can be significant, but most 401k plan costs are going to be grouped around the median,” said David W. Huntley, co-publisher of the 401k Averages Book, in a press release.
According to the 401k Averages Book report the range between the high and low cost for a 50 participant plan with $2,500,000 in assets is 1.24%, while the range for the middle 50% of the universe is .29%. The median total plan cost for this plan size is 1.49%.
The press release said the disparity between high and low costs is largest for plans with smaller plan assets and more participants. The 401k Averages Book study shows the range of total plan costs for a plan with 200 participants and $2,000,000 is 1.48%, while the range for the middle 50% of the universe is .32%. The median total plan cost for this plan size is 1.70%.
Huntley said: “With all the focus on fee disclosure and 408(b)(2) it’s important employers and their advisers compare their fees to a benchmark and understand where they fit into the range of costs in the marketplace.”The 11th Edition of the 401k Averages Book is available for $95. It can be ordered by calling (888) 401-3089 extension 1 or at http://www.401ksource.com.
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